Sarah S. Riordan
New York, NY | December 13, 2017
Moody's Investors Service
Moody's Investors Service has assigned a 'Aa2' rating to $159.5 million Indianapolis Local Public Improvement Bond Bank Bonds (IN), Series 2017C (PILOT Infrastructure Project). Moody's maintains the Aaa rating on Indianapolis-Marion County (the city), IN's outstanding general obligation (GO) debt.
The Aaa GO rating reflects a diverse economy, improved financial position and moderate pension liabilities. These attributes are balanced against challenges that include weak resident income indices, a restrictive revenue raising environment and high debt levels.
The Aa2 rating on $159.5 million of Refunding Bonds, Series 2017C (PILOT Infrastructure Project) reflects the credit characteristics inherent in the city's GO rating. The MO rating on the current bonds is notched twice from the city's GO rating, reflecting the city's MO pledge to consider appropriating to replenish the debt service reserve (DSR), the risk of non-appropriation, and the more essential nature of the financed assets (wastewater system infrastructure improvements).
The outlook on all ratings is negative. The negative outlook reflects weak resident income indices and a restrictive revenue-raising environment, both of which will challenge the city to grow revenues that keep pace with ongoing cost growth, particularly in the areas of public safety, capital maintenance, debt service, and pensions.
